ADTRAN, Inc. (NASDAQ:ADTN) reported results for the fourth quarter 2012.
For the quarter, sales were $139,756,000 compared to $175,286,000 for
the fourth quarter of 2011. Net income was $3,961,000 for the quarter
compared to $31,163,000 for the fourth quarter of 2011. Earnings per
share, assuming dilution, were $0.06 for the quarter compared to $0.48
for the fourth quarter of 2011. Non-GAAP earnings per share for the
quarter were $0.11 compared to $0.54 for the fourth quarter of 2011. The
reconciliation between GAAP earnings per share, diluted, and non-GAAP
earnings per share, diluted, is in the table provided.

ADTRAN Chief Executive Officer Tom Stanton stated, “Our fourth quarter
results came in largely as expected with both our carrier and enterprise
divisions performing to forecast. Our focus remains on capitalizing on
the significant network upgrades that lie ahead of us while maintaining
tight cost control as we navigate through the current environment.”

The Company also announced that its Board of Directors declared a cash
dividend for the fourth quarter of 2012. The quarterly cash dividend is
$0.09 per common share to be paid to holders of record at the close of
business on February 7, 2013. The ex-dividend date is February 5, 2013
and the payment date is February 21, 2013.

The Company confirmed that its fourth quarter conference call will be
held Wednesday, January 16, 2013 at 9:30 a.m. Central Time. This
conference call will be web cast live through StreetEvents.com. To
listen, simply visit the Investor Relations site at www.adtran.com
or www.streetevents.com
approximately 10 minutes prior to the start of the call and click on the
conference call link provided.

An online replay of the conference call will be available for seven days
at www.streetevents.com.
In addition, an online replay of the conference call, as well as the
text of the Company's earnings release, will be available on the
Investor Relations site at www.adtran.com
for at least 12 months following the call.

ADTRAN, Inc. is a leading global provider of networking and
communications equipment. ADTRAN’s products enable voice, data, video
and Internet communications across a variety of network infrastructures.
ADTRAN solutions are currently in use by service providers, private
enterprises, government organizations, and millions of individual users
worldwide. For more information, please visit www.adtran.com.

This press release contains forward-looking statements which reflect
management’s best judgment based on factors currently known. However,
these statements involve risks and uncertainties, including the
successful development and market acceptance of new products, the degree
of competition in the market for such products, the product and channel
mix, component costs, manufacturing efficiencies, and other risks
detailed in our annual report on Form 10-K for the year ended December
31, 2011 and on Form 10-Q for the quarter ended September 30, 2012.
These risks and uncertainties could cause actual results to differ
materially from those in the forward-looking statements included in this
press release.

Adjustments to reconcile net income to net cash provided by
operating activities:

Depreciation and amortization

14,079

11,499

Amortization of net premium on available-for-sale investments

8,257

6,617

Net realized gain on long-term investments

(9,550

)

(12,454

)

Net (gain) loss on disposal of property, plant and equipment

(214

)

6

Gain on bargain purchase of a business

(1,753

)

-

Stock-based compensation expense

9,264

9,169

Deferred income taxes

(3,785

)

575

Tax benefit from stock option exercises

1,905

10,525

Excess tax benefits from stock-based compensation arrangements

(1,456

)

(9,373

)

Change in operating assets and liabilities:

Accounts receivable, net

(4,365

)

(4,939

)

Other receivables

2,977

(5,781

)

Income tax receivable, net

-

2,741

Inventory

7,163

(12,734

)

Prepaid expenses and other assets

(1,045

)

522

Accounts payable

7,265

6,178

Accrued expenses and other liabilities

11,583

6,309

Income tax payable, net

(1,960

)

3,169

Net cash provided by operating activities

85,628

150,606

Cash flows from investing activities:

Purchases of property, plant and equipment

(12,075

)

(11,912

)

Proceeds from disposals of property, plant and equipment

266

-

Proceeds from sales and maturities of available-for-sale investments

282,039

466,243

Purchases of available-for-sale investments

(282,740

)

(554,629

)

Acquisition of business

7,496

(22,661

)

Net cash used in investing activities

(5,014

)

(122,959

)

Cash flows from financing activities:

Proceeds from stock option exercises

6,049

34,125

Purchases of treasury stock

(39,362

)

(35,565

)

Dividend payments

(22,813

)

(23,124

)

Payments on long-term debt

(500

)

(1,000

)

Excess tax benefits from stock-based compensation arrangements

1,456

9,373

Net cash used in financing activities

(55,170

)

(16,191

)

Net increase in cash and cash equivalents

25,444

11,456

Effect of exchange rate changes

34

(154

)

Cash and cash equivalents, beginning of period

42,979

31,677

Cash and cash equivalents, end of period

$

68,457

$

42,979

Supplemental Information

Acquisition Related Expenses, Amortizations and Adjustments

(Unaudited)

(In thousands)

On August 4, 2011, we closed on the acquisition of Bluesocket,
Inc. and on May 4, 2012, we closed on the acquisition of the Nokia
Siemens Networks Broadband Access business (NSN BBA). Acquisition
related expenses, amortizations and adjustments for the three and
twelve months ended December 31, 2012 and 2011 for both
transactions are as follows:

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2012

2011

2012

2011

Bluesocket, Inc. acquisition

Amortization of acquired intangible assets

$

267

$

297

$

1,020

$

495

Amortization of other purchase accounting adjustments

29

304

443

521

Acquisition related professional fees, travel and other expenses

-

100

-

730

Subtotal

296

701

1,463

1,746

NSN BBA acquisition

Amortization of acquired intangible assets

290

-

762

-

Amortization of other purchase accounting adjustments

587

-

2,305

-

Acquisition related professional fees, travel and other expenses

323

1,035

4,860

2,027

Subtotal

1,200

1,035

7,927

2,027

Total acquisition related expenses, amortizations and adjustments

1,496

1,736

9,390

3,773

Tax effect

(488

)

(658

)

(3,148

)

(1,434

)

Total acquisition related expenses, amortizations and
adjustments, net of tax

$

1,008

$

1,078

$

6,242

$

2,339

The acquisition related expenses, amortizations and adjustments
above were recorded in the following Consolidated Statements of
Income categories for the three and twelve months ended December
31, 2012 and 2011:

Three Months Ended

Twelve Months Ended

December 31,

December 31,

2012

2011

2012

2011

Revenue (adjustments to deferred revenue recognized in the period)

$

377

$

207

$

1,528

$

362

Cost of goods sold

154

99

1,086

165

Subtotal

531

306

2,614

527

Selling, general and administrative expenses

330

1,133

4,510

2,557

Research and development expenses

635

297

2,266

689

Subtotal

965

1,430

6,776

3,246

Total acquisition related expenses, amortizations and adjustments

1,496

1,736

9,390

3,773

Tax effect

(488

)

(658

)

(3,148

)

(1,434

)

Total acquisition related expenses, amortizations and
adjustments, net of tax

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